Articles & Questions
Every week I publish a fun new article on a money topic I think you’ll find interesting. I also answer a handful of reader questions. Subscribers to my newsletter get to see everything first — but you can browse some of my past articles & questions on this page.
My Best Articles
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Crypto Low
Hi Scott, I have always put my savings in a long-term deposit bank account. However, starting about 12 months ago, I decided to use half of this money to invest in cryptocurrencies, and this resulted in a 90% loss.
Hi Scott,
I have always put my savings in a long-term deposit bank account. However, starting about 12 months ago, I decided to use half of this money to invest in cryptocurrencies, and this resulted in a 90% loss. I then used the remaining of my savings in some blue-chip ASX shares that have delivered a 25% loss. Of my original $40,000 I currently have just $10,000! Should I accept this loss, cash out, and put my $10,000 back in the bank -- or hold?
Phil
Hi Phil,
Holy Moly.
This year really has been your ‘annus horribilis’, to quote the Queen. Now given your experience, you probably think everything is a scam. However, please don’t confuse punting on crypto and investing in shares. The small, but fundamental difference is that you are becoming a part-owner in a (hopefully) profitable business, that (hopefully) pays you a growing dividend.
So, what would I do?
Well, after suffering a 90% loss on your crypto, I’d mentally write them off as worthless, but continue holding them just in case crypto madness returns. However I’d hold and add to the blue chips over time. It’s the slow and steady accumulation of dividends that will make you wealthy. The rest is just noise.
Scott
Do I Have to Pay Tax on Bitcoin?
Hi Scott, I have just bitten the bullet and invested in Bitcoin (and it has been a wild ride over the past week!).
Hi Scott,
I have just bitten the bullet and invested in Bitcoin (and it has been a wild ride over the past week!).
Judging from what the experts suggest, the price could hit $60,000.This got me thinking -- what tax will I pay on my gains?
Lloyd
Hi Lloyd,
If your purchase of Bitcoin was under $10,000, and you’re only using it to pay for goods or services, any capital gain you make will be tax free because the Tax Office considers it a ‘personal use asset’.
However, you’re speculating (i.e. hoping to ‘get rich or die tryin’, as Fiddy Cent says), so you’ll pay tax on any capital gain at your marginal tax rate. Having said that, if you hold on for at least 12 months, you’ll be able to claim a 50% capital gains tax discount.
Even though the Tax Office can’t track Bitcoin, they still want their share of any capital gain you make. So make sure you keep good records (transaction dates, how much you invested, the price you bought and sold for) in case you get audited.
Finally, if you cop a loss on your Bitcoin, you can use it to offset capital gains made that year, or you can carry it forward to offset against gains made in the future. (Losing money on Bitcoin? That’s never going to happen, right?)
Scott